NYC Comptroller Scott Stringer. Image credit: Office of the New York City Comptroller

Comptroller found that Landmarks did not record issuance dates for Certificates of No Effect, did not send timely notices to applicants who submitted incomplete applications, and did not reconcile permit fees collected by Buildings with permits issued by Landmarks issued. On November 30, 2016, the New York City Comptroller Scott Stringer released an audit report on the Landmarks Preservation Commission procedures and controls surrounding the issuance of Certificates of No Effect. Certificates of No Effect must be obtained from Landmarks before a property owner or tenant can perform certain kinds of work on individual landmarks or property within a historic district. Certificates of No Effect are issued for proposed work that requires a Buildings permit but does not affect a building’s essential architectural features. Expedited Certificates of No Effect are available for certain interior alterations above the second floor or below grade level. Certificates of No Effect, as opposed to Certificates of Appropriateness, do not require a public hearing or review by commissioners.

The audit sought to determine whether Certificates of No Effect were being processed in a timely manner. In the 2015 Mayor’s Management Report, it was reported that Landmarks processed 91 percent of the Certificates of No Effect within ten days, and 90 percent of the expedited permits in two days.

Landmarks is required, under the Administrative Code, to make a decision on a complete application within 30 days. Landmarks has set a goal of making a decision and issuing the permit within two weeks.

Auditors were unable to determine the promptness with which permits were issued, because Landmarks did not record actual permit issue dates. Applications are recorded in Landmarks’ Permit Application Tracking System, and the system has a field in which an “issue date” can be manually entered. Though Landmarks has been using this date to calculate the number of days taken to issue permits, auditors found that that date recorded reflected the permits’ internal submission to a supervisor for review and approval. The issue date field is generally not further updated when the permit is printed and mailed. Nowhere else is the issuance date recorded.

Auditors also determined that Landmarks was not reviewing the application process in a timely fashion. If Landmarks receives an incomplete application, it sends a materials checklist to the applicant requesting the lacking information. If the additional materials are not received within 60 days, Landmarks sends another letter informing the applicant that the application will be withdrawn if the materials are not received within 30 days. The audit found that 25 percent of in-progress certificates had been in the system in excess of 120 days. Emails were also not always sent in a timely manner. Auditors concluded that staff was not withdrawing applications, and supervisors were not reviewing the application process to see how long applications had been pending.

Auditors further found that Landmarks does not reconcile permit fees collected by Buildings with the permits Landmarks issued, and that the City does not consistently require that a permit fee be collected for every permit issued. Buildings collects the application fees and sends a monthly revenue report to the agency. Landmarks’ failure to reconcile meant that uncollected revenue or misappropriation of funds was more likely to go undetected. The Comptroller’s office posited that more than $1.9 million in permit fees possibly went uncollected between July 2014 and October 2015.

The Comptroller’s Office made a series of recommendations in its report, including that the “issue date” field in the tracking system be updated to reflect the actual date the permits were issued, that Landmarks should monitor and document the dates on which permits were mailed, and implement controls to correct deficiencies in the agency’s data processing. The report recommended that Landmarks should measure the length of time between receiving applications and mailing permits, or reveal in the Mayor’s Management Report that the “issue date” does not represent the date of the permit’s mailing. Auditors said Landmarks should take measures to ensure that notifications are sent to applicants when applications are incomplete in a timely manner, and that all applications are time-stamped on receipt.

Landmarks responded that a new system for processing and recording the permit applications, named APPTRAK, was being developed, which would correct many of the issues identified in the report. Landmarks said the institution of the new program would ensure that the issue date reflected a permit’s printing for mailing, monitor all steps in the applications process, and systematize the mailing of notifications for incomplete applications.

Regarding permit fees, the Comptroller’s office suggested that Landmarks should collect the minimum fee when it issues a permit so that a fee is collected for every permit issued. Landmarks responded that it had no capacity for receiving payments, and it would be expensive and duplicative of Buildings to create such a capacity. The agency agreed that regular reconciliation of permits was appropriate.